CPIM Practice Exam

In a scenario with 700 units of A and 400 units of B, each having different standard labor hours, what labor surplus or shortfall is calculated given 2 workers with 160 hours available each?

1. -40 units

2. -20 units

3. 20 units

4. 40 units

The correct answer is: 20 units

To determine the labor surplus or shortfall in this scenario, it's essential to calculate the total labor hours required for both products A and B, then compare this to the total available labor hours. Initially, you have 700 units of A and 400 units of B, with each unit requiring a specific number of labor hours. If you add up the total labor requirements based on the units and their respective labor hours, you will get a total labor demand. Next, with 2 workers available, each providing 160 hours, the total available labor hours amount to 320 hours (2 workers x 160 hours). Once you have the total labor hours required for both products, calculating the difference between the total demand and the available supply will give you the labor surplus or shortfall. In this case, if the total labor hours required exceed 320 hours, the result will show a labor shortfall, indicated by a negative figure. If it’s less, it shows a labor surplus, represented as a positive number. Given the answer is described as 20 units, this likely indicates a surplus, meaning the total labor required is less than the labor available, resulting in an ability to handle additional units without needing extra labor, hence the positive figure of